PHX East Valley, Airport Area See Most Office Leasing in Q1

Original Article via Mike Sunnucks, Phoenix Business Journal

East Valley submarkets such as Tempe and Chandler, as well as areas near Phoenix Sky Harbor International Airport, have dominated the regional office market during the first quarter.

That’s according to new commercial real estate numbers from JLL (NYSE: JLL).

For the entire Phoenix market, the office vacancy rate is 19.9 percent. If available subleased space is excluded, the office vacancy rate is 18.6 percent, according to JLL researchers.

Phoenix has had a high vacancy rate compared to other large U.S. markets since the Great Recession.

Mark Singerman, vice president and regional director for the Rockefeller Group in Chandler, told the Phoenix Business Journal in a recent interview that there are smaller blocks of space still available in the local market that have been hard to lease.

Essentially all the net leasing activity in metro Phoenix is in the East Valley and Sky Harbor area. They had a combined 961,888 square feet of net leasing — known in the industry as absorption — during the first quarter, according to JLL.

Tempe, which has seen big leasing activity from State Farm and DriveTime/Carvana, had the most first quarter absorption at 596,248 square feet.

The airport area was next with 189,316 square feet, and Chandler is third with 123,183 square feet.

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